Saturday, November 10, 2007

Roosevelt Island Mitchell-Lama Buildings Receive FMV Tax Equivalency Bills from State Despite City Resolution Extending Exemptions

WIRE Banner - 50 Year Resolution

This week just prior to its 30th anniversary the Rivercross Building on Roosevelt Island received a tax equivalency bill from the Empire State Development Corporation which could potentially increase monthly costs to each tenant by 45%. In addition to the Rivercross building both the Island House and the Westview buildings received similar tax equivalency bills. Such increases would destroy the affordability of these buildings to many of their tenants especially those on fixed incomes.

According to a flyer posted in its lobby, the Rivercross Board of Directors announced that if the tax bill stands it could force maintenance charges to increase by approximately 45% to cover this added cost to their building. Of the four original Mitchell-Lama buildings Rivercross is the only co-op building.

The ground lease issued to the Rivercross building provided that payments in lieu of real estate taxes would extend through 2007 the thirtieth anniversary of the issuance of the building’s certificate of occupancy. The ESDC is the successor in interest to the NYS Urban Development Corporation.

The tax bill received by Rivercross this week stated that the 30 year period had ended and that effective September 15, 2007, the buildings tax equivalency payments were increased to approximately $3.6 million per year.

The New York City Council in 2005 had passed Resolution 388-A granting real property tax exemptions for an additional 50 year period to private housing companies, including Mitchell-Lama buildings. According to the Rivercross flyer the list of applicable housing companies attached to the resolution included Rivercross. The resolution linked to here does not include that list. There had been some concern whether the City resolution applied to the Roosevelt Island buildings but in each building’s case local politician assured the buildings that as long as they stayed in the Mitchell-Lama program the resolution would be applicable to them and protect their tax status.

As reported in the most recent issue of the Main Street Wire, the Rivercross building announced its intent to formally notify the DHCR that it intended to leave the Mitchell-Lama program but no such filings have been made to date. As of today Rivercross still exists as a Mitchell-Lama property.

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